March 18, 2021 - An investor in shares of Lordstown Motors Corp. (NASDAQ: RIDE) filed a lawsuit in the U.S. District Court for the Northern District of Ohio over alleged violations of Federal Securities Laws by Lordstown Motors Corp. in connection with certain allegedly false and misleading statements made between August 3, 2020 and March 17, 2021.
Lordstown, OH based Lordstown Motors Corp., an automotive company, develops, manufactures, and sells light duty electric trucks targeted for sale to fleet customers.
Lordstown Motors Corp. reported that its annual Total Revenue declined from over $8.28 billion for the 12 months period that ended on January 31, 2019, to $6.46 billion for the 12 months period that ended on January 2020, and that its Net Loss over those respective time periods declined from $673 million to $470.9 million.
On March 12, 2021, a report was published entitled: "The Lordstown Motors Mirage: Fake Orders, Undisclosed Production Hurdles, And A Prototype Inferno" In the report, Hindenburg alleged that, based on "conversations with former employees, business partners and an extensive document review" the Company's book of 100,000 pre-orders "are largely fictitious and used as a prop to raise capital and confer legitimacy." The report went on to say that "[f]ormer employees also shared that the company has completed none of its needed testing or validation, including cold weather testing, durability testing, and Federal Motor Vehicle Safety Standards (FMVSS) testing required by the NHTSA."
Shares of Lordstown Motors Corp. (NASDAQ: RIDE) declined from $348.50 per share on March 10, 2021, to $222.50 per share on March 15, 2021.
According to the complaint the plaintiff alleges on behalf of purchasers of Lordstown Motors Corp. (NASDAQ: RIDE) common shares between August 3, 2020 and March 17, 2021, that the defendants violated Federal Securities Laws. More specifically, the plaintiff claims that between August 3, 2020 and March 17, 2021, the Defendants failed to disclose to investors that the Company’s purported pre-orders were non-binding, that many of the would-be customers who made these purported pre-orders lacked the means to make such purchases and/or would not have credible demand for Lordstown’s Endurance, that Lordstown is not and has not been "on track" to commence production of the Endurance in September 2021, that the first test run of the Endurance led to the vehicle bursting into flames within 10 minutes, and that as a result, Defendants' statements about its business, operations, and prospects, were materially false and misleading and/or lacked a reasonable basis at all relevant times.